American Ethanol: The Key to American Energy Security

The U.S biofuels industry is at a crossroads. On one hand, the industry is creating jobs in rural America, reducing U.S. dependence on foreign oil and cleaning up our air. On the other hand, the industry is under threat by misguided politicians and special interest groups. Now is the time where we need to make a decision: do we continue down the same path of sending billions of dollars a year to the Middle East for dirty oil or do we invest in a homegrown renewable fuel source that creates thousands of jobs in the United States?

Representatives Bob Goodlatte, R-VA., and Jim Costa, D-Calif., recently introduced a bill that would arbitrarily reduce or eliminate the volumes of renewable fuel use required by the Renewable Fuel Standard (RFS) based upon corn stocks-to-use ratios. NFU along with other agricultural and biofuels groups sent a letter to Congress opposing this measure.

Such recent anti-ethanol legislation and rhetoric is not made better by a recent National Research Council (NRC) report that puts ethanol’s economic and environmental credentials in doubt. However, upon further review, it is clear that there are serious issues with the methodology. For example, the report studies ethanol by itself, without comparing it to the relative environmental and economic costs of using marginal petroleum sources such as Canadian tar sands and shale oil. Ethanol displaces a significant amount of these dirty and expensive petroleum sources. Even the report itself states that “…our clearest conclusion is that there is a very high uncertainty in the impacts we were trying to estimate.” In fact, a previous study published by one of the NRC committee co-charis and Purdue University found that “…at present and in the near future, using corn ethanol reduces greenhouse gas emission by more than 20% relative to those of petroleum gasoline.” Finally, Agriculture Secretary Vilsack said the report bases its conclusions “on information that’s not as accurate as it once was.” The NRC report claims, for example, that ethanol production can use up to 1,500 gallons of water per gallon of ethanol. However, according to previous studies such as the one published in Biotechnology Letters, today ethanol requires less than three gallons of water per gallon of ethanol.

According to the Renewable Fuels Association, the ethanol industry employs about 400,000 workers. At a time of high unemployment, it is dangerous to target a developing sector that is responsible for so many jobs. While the oil industry continues to enjoy federal subsidies to the tune of $4 billion each year, how can we justify limiting support for a domestically produced renewable fuel?

The biofuels industry not only creates jobs in rural America, put also puts money back into the pockets of the rest of America. A recent study by economists at the University of Wisconsin and Iowa State University found that in 2010, ethanol reduced gas prices by $0.89. The study also found that growth in ethanol production reduced gasoline prices by an average of $0.25 per gallon, or 16 percent, over the entire decade of 2000-2010.

American ethanol is the only fuel that is currently offsetting the tremendous economic, political and societal costs of importing oil. Ethanol is a significant boon to rural America: it creates jobs, stimulates local economies and cleans up the air. It is vital that we don’t take our foot off the pedal in supporting this job creating industry.